The senior Congress leader was arrested from his posh Jor Bagh residence where some officers from the central investigative agency scaled walls to gain entry.
The arrest took place hours after Chidambaram failed to get any immediate reprieve from the Supreme Court.
The drama started with Chidambaram making an appearance at the AICC headquarters where he addressed a press conference and claimed innocence.
As Chidambaram reached his residence, the CBI team followed the formed union minister.
With a big media contingent beaming live images of the developments, the CBI team first knocked the gates to gain entry but finding no response, they nimbly scaled the nearly five-foot high walls to gain entry.
Once three officers reached inside, they opened the gates to allow other team members waiting outside. Soon a team of officers, identifying themselves as from ED, too arrived at the scene.
Delhi Police personnel were also posted to prevent any adverse law and order situation.
Another small team of officials rushed to the backdoor to secure all entry and exit points of the bungalow.
A team of about two dozen officials was present at the bungalow with Chidambaram being inside with other Congress leaders and renowned lawyers Kapil Sibal and Abhishek Manu Singhvi.
After spending about fifty minutes inside his house, the probe teams took Chidambaram into custody and reached CBI head office where the leader was formally arrested.